Appraisal myths & facts

It is mandated by legal agencies that a real estate appraiser needs to be state-licensed to perform appraisals for federally-related real estate sales in Louisiana. The law entitles you to get a copy of your completed report from your lending agency after it has been produced. Contact Crescent Appraisal Group, Inc. if you have any questions about the appraisal process.

Myth: Market value must be similar to the assessed value of the property.

Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby houses are exact examples of why the price can vary.

Myth: The opinion of value of a home will change depending upon if the appraisal is provided for the buyer or the seller.

Fact: The appraiser has no vested interest in the outcome of the appraisal and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Market value will be the same as replacement cost.

Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a property without being under influence from any external party to buy or sell. If the home were reconstructed, the dollar amount necessary to do so would form the replacement cost.

Myth: There are certain ways that real estate appraisers use to show the value of a house, like the price per square foot.

Fact: There are many varied methods that an appraiser will use to make a comprehensive analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable properties.

Myth: In a strong economy - when the costs of properties in a given region are found to be increasing by a particular percentage - the prices of individual houses in the area can be expected to appreciate by that same percentage.

Fact: All increase of value is on a case-by-case basis, concluded by data on relevant considerations and the data of comparable homes. It makes no difference if the economy is excellent or bad.

Myth: You can generally tell what a home is worth simply by looking at the outside.

Fact: House worth is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just looking at the home from the outside.

Myth: Since you're the one paying for the appraisal report when applying for the loan to purchase or refinance your house, you own the produced appraisal report.

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. However, consumers have to be provided with a copy of the report upon written request, because of the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the necessities of their lending company.

Fact: Only if home buyers examine a copy of their appraisal can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, containing helpful and often-revealing data - including, but not limited to, the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the proximity.